Previously, in order to obtain account balances from the ledgers in a double-entry recordkeeping (i.e., bookkeeping) system, it was necessary to manually enter accountable transactions in one or more journals, manually post the accountable transactions to corresponding accounts in the general and subsidiary ledgers of the system, and then manually balance the accounts in the ledgers.
The term "trial balance" applies to a list or abstract of money amounts and their totals, or of the debit balances and credit balances of all accounts in a particular ledger. The trial balances are used for accounting control in the double-entry recordkeeping process and provide useful information concerning the financial state of the recordkeeping entity, such as a business, professional office, government agency, etc., whose accounts are being maintained.
The manual procedure for maintaining the bookkeeping records generally follows a well-known sequence. First, the debit and credit amounts relating to accountable transactions are entered in the journals by recording those amounts in the appropriate debit and credit columns of the journals. The money amounts recorded in each column for all entries within a given accounting period are summed at the end of such period. If each original entry was correctly balanced, that is debit equals credit, and the money amounts correctly summed for each debit and credit column, then the total money amounts of the debit columns should sum to the totalled money amounts of the credit columns.
The correctly balanced money amounts from the journals must then be posted to the respective accounts in the ledgers of the bookkeeping system. Each individual ledger account has a summary balance which provides either a debit balance or a credit balance for that account up to the date of posting.
The generally accepted practice is to record original entries in the journal and then post entries to the ledger accounts in ink in order to make any subsequent alterations visibly apparent to those involved in maintaining the bookkeeping system. Furthermore, because the ledger accounts are only posted periodically the trial balances are usually obtained at infrequent intervals corresponding to the particular accounting period, such as the end of the month.
Computer based accounting systems have been developed in an effort to speed up the accounting process for recordkeeping entities having a large number of accountable transactions, as well as a large number of ledger accounts which must be maintained. Unlike manual bookkeeping systems in which individual accounts are marginlined in ink so that changes or revisions can only be effected through the posting of correcting entries, computer systems introduce the possibility of computer records being altered or erased or deleted without any indication of a separate, correction entry. This has created a number of serious accounting, auditing, and reporting problems, such as detection of unauthorized changes to the data recorded in the computer records, unauthorized deletion of valid records, and unauthorized insertion of accounting records.
In an attempt to solve the problems associated with computer based accounting systems, elaborate and expensive programming schemes have been devised. Some of those schemes require production of large volumes of paper output formatted to simulate the traditional journals and ledgers. The drawback to such an approach is that the simulated journals and ledgers are produced after the fact and may not provide any indication of changes to or deletions from the computer's records. Other schemes are so complex they require the average accountant or auditor to rely on a computer specialist for assistance in understanding how the computer system works.